5 Promotions Opportunity Analysis COPY

7/31/2019 5 Promotions Opportunity Analysis COPY

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PROMOTIONS

OPPORTUNITY ANALYSIS

INTEGRATED MARKETINGCOMMUNICATION


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The Promotional connect

Beyond the world of advertising &

person selling, successful marketingefforts occur because someone identified

an opportunity to make a quality

contact with a customer.


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The Promotional connect DTHEY?


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Undertaking a thoroughPromotions OpportunityAnalysis (POA) is critical!

Not every Promotion connects


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What is POA?

the process marketers adopt, to matchtarget audiences for goods & serviceswith a promotional communication, thatevokes an effective, positive response.

Two clear goals:

1. Determine which promotionalopportunities exist, &

2. Identify characteristics of targetaudience to match withcommunications message.


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Developing POA: theprocess

1. Conduct a communication market

analysis;2. Establish communication objectives;

3. Create communications budget;

4. Prepare promotional strategies;

5. Match tactics with strategies.

Q. WHAT RECENT PROMOTION HASATTRACTED YOU RECENTLY AS ACUSTOMER?


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A) Communication MarketAnalysis WHY?

1. To focus on an organizations marketingcommunication strengths &weaknesses, &

2. Discover opportunities (or threats) inthe firms external environment.

What must the analysis cover?1. Competitors;2. Opportunities;3. Target markets;4. Customer groups;5. Product positioning.


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A) Communication MarketAnalysis1. Competitors:

Analyze competitive promotional history(recent), promotional campaigns/materials;

Obtain feedback from salesforce/market;

Research (Primary/Secondary) toassess customer response.

Opportunities:1. Find gaps in the market i.e.

opportunities to pursue;

2. Articulate benefits that can fill thegap;3. Create new opportunities to attract

new customers/build customer

relationships.


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A) Communication MarketAnalysis Target markets:

1. Examine target markets;2. Select target market of interest to the

firm;

3. Recognize needs & identify benefitsto match. Customers:1. Cover all: Current/ Competitive/

Potential;

2. Analyze what type of message worksfor each customer group/ or one thatworks for all;

3. Make changes & improvements as

required.


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A) Communication MarketAnalysis

Product Positioning:1. Determine how the brands

positioning is perceived byconsumers, businesses, andcustomers;

2. Ensure promotion & promotionalcommunication tie up with product

positioning.


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B) Define objectives:Some Popular Options!

1. Develop brand awareness;

2. Increase category demand;

3. Change customer beliefs & attitudes;

4. Encourage purchase/ repeatpurchase;

5. Build customer traffic;

6. Enhance firms image;

7. Increase market share.


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B) Setting communicationsobjectives how firms do it!

Companies often benchmark objectivesagainst a market leader or competition;

A successful communication objective isreflected in the medium & messageadopted;

Often a combination of objectives is

used by brand managers.


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C) Establishing a budget

Budgets must be linked with/ or bebased on objectives;

Differences in market characteristicsmust be accounted for arriving ateffective budgets;

Realistic relationship between causeand effect of every action must beunderstood/ assumed.


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The Sales-Response FunctionCurve

An S-shaped sales-response function

curve explains the factors that affect therelationship between Sales &Promotional (A&P) expenditure.

It analyzes impact on Sales Revenue &impact on Profit.


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A Typical Sales-Response FunctionCurve

Thresholdeffects

Sales

ADVERTISING AND PROMOTIONAL EXPENDITURE

MarginalAnalysisCurve

Diminishing Returns

Concave

downwardresponse curve

Profits

DOLLAR

SALES


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CurveFour types of factors or effects1. Threshold effects: the stage at whichthe consumer is willing to respond;

2. Carryover effects: post campaign stage,when a message continues to stay in the

mind (until the need-to-buy arises;3. Wear-out effects: when the message

becomes old and boring and ceases tomotivate;

4. Decay effects: when the message is lost& forgotten & has no impact on buyerbehavior.


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The Sales-Response FunctionCurve

When a promotion is at the thresholdand therefore most effective;

When diminishing returns start to setin (concave downward function);

The marginal analysis curve shows

when the effect of A&P expenditure onprofit becomes negative).

C) M h d f bli hi


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C) Methods of etablishing abudget Percentage of sales method;

Matching the competition method;

What company can afford method;

Objective and task method;

Payout planning method (ratio ofadvertising to market share, allocatinglarger amounts in earlier years);

Quantitative models/ computersimulations.

Q. Which of the above do you find mostpractical?


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C) Splitting the Budget by Media

What needs need to be considered:

1. What is the industry practice?

2. What is the stage of life cycle?

3. What are the media trends?

4. WHAT IS THE COMPANYSPRIORITY/ EXPERIENCE?


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D) Preparing Promotional Strategies Creating the right strategy: Strategies

define the roadmap for a companyspromotional effort, and determine itssuccess.

The typical Mountain Dew approach:

1. Target market: Teenagers & Young Adults

2. Objective: Attract younger people or thoseyoung at heart

3. Slogans: Do the Dew & Been There DoneThat

4. Theme of communication: Action oriented,

high-risk activities & situations.


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D) Matching Tactics with Strategies

Tactics are activities performed tosupport strategies;

Tactics must not distract consumers from

the consistent message of the company,& neutralize its impact.

Some common tactics used in

promotions: Price Offs, Coupons, GiftCertificates, Bonus Packs, SpecialPackaging, Contests & Prizes, Rebates,Volume Discounts etc.

Documents

5 Promotions Opportunity Analysis COPY